Mainstream economists question the new classical assumption that
A)excessive growth of the money supply is a cause of inflation.
B)the price level is determined by aggregate demand and aggregate supply.
C)demand creates its own supply.
D)wages and prices are equally flexible upward and downward.

Question

Quizplus · Accepted Answer

Mainstream economists often question the new classical assumption that wages and prices are equally flexible upward and downward, as real-world evidence suggests that wages and prices tend to be sticky, especially downward.

Mainstream Economists Question the New Classical Assumption That